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CA Sunil Arora: Tax Collection at Source on Sale of goods w.e.f. 01/10/2020

ment ease of doing business in India, the Government has increased one more compliance for any person who is selling any goods.

The new provision is applicable to Sellers having turnover exceeding Rs. 10 Crores in the previous Financial year i.e. year ended 31/03/2020.

Section 206C(1H) becomes operative w.e.f. 01/10/2020 which provides for tax collection at source @ 0.1% on sale of goods exceeding Rs. 50 Lacs in any Financial Year to any buyer.

Implying thereby that a seller of goods will add and collect the aforesaid TCS @ 0.1% on sales to any person exceeding Rs. 50 Lacs in a year and deposit the said amount with the revenue department.

All though the provision is applicable w.e.f. 01/10/2020 the sale for the purpose of the threshold limit of Rs. 50 Lacs will have to be calculated w.e.f. 01/04/2020 for the current year.

PAN of the Buyer is Mandatory The seller also must obtain PAN of the buyer. Aforesaid rate of 0.1% will stand increased to 1% in case the buyer’s PAN is not provided to the seller.

The provision for TCS U/s 206C(1H) will not apply in case the buyer is liable to deduct tax on the said transaction under any provision of the Income Tax Act, 1961 as well as in the case of export of goods.
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